The convergence of SaaS and services has re-focused the ROI of software towards achieving defined business outcomes. With so many sophisticated SaaS platforms on the market – many of which offer far greater functionality than most enterprise customers need – the onus is shifting rapidly towards the business value these solutions bring to customers and how they support alignment with a OneOffice mindset. This is a major pivot away from customers simply purchasing what they are led to believe are the best features and functions and expecting miracles. Our new SaaS XXV research initiative is geared towards defining these business outcomes and measuring the leading – and upcoming – SaaS platforms against their customers achieving these outcomes.
So where better to start than looking at the leading services being built around low-code leader Pega….
“The power to simplify: What you need to crush complexity” – This was Alan Trefler’s ( Pega Founder and CEO ) key-note at the PegaWorld iNspire 2021. What stood out for me in Alan’s ~13-minute key-note was how to crush complexity. Simply put, it is about getting the business architecture right! This means an architecture that is organized around the heart of the business, customer and outcomes across the customer journey.
Putting the customer at the center is critical to the success of a transformation to drive meaningful and measurable outcomes. This was also a key insight from our latest HFS Pega Service Providers Top 10 2021:
To learn more about how the Pega market is evolving, what service provides are leading the way and how clients are leveraging Pega, I sat down with analysts Krupa K S and Khalda De Souza to learn about their experiences and insights from working on this report.
Phil Fersht, CEO and Chief Analyst, HFS Research: So, Khalda – My first question to you is around understanding the Pega services market. Please can you share the highlights and significant developments?
Khalda De Souza, Research Fellow, HFS Research: Pega offers integrated back-office and front-office solutions along with automation offerings and a low-code application development platform. This portfolio aligns nicely with the HFS OneOffice framework, which also advocates for a connected enterprise approach to solving today’s business problems. Pega encourages enterprises to adopt a “center-out” approach to modernization that focuses on customer outcomes. This involves considering customer microjourneys, which connect all the relevant systems to provide call center agents with the right information for answering the current question and predicting the next best action. A key bonus for customers is what Pega calls Cloud Choice, where customers can choose to run their solution on the AWS-powered Pega Cloud as a managed service, on any other cloud, or even on-premises.This myriad of offerings provides many opportunities for service providers to assist customers with Pega deployments.
The HFS Pega services Value Chain includes services to support Plan, Implement, Manage and Optimize phases of a Pega deployment journey. And this really is a life cycle. A SaaS deployment is never a ‘one and done’ implementation. Instead, it requires a continuous improvement mindset, involving an ongoing development and implementation approach. This is why Pega advocates that customers should implement a center of excellence (CoE) to continually identify new opportunities to improve the system. Therefore, Pega service partners’ ability to establish long-term relationships with clients is increasingly more about delivering ongoing consulting and implementation services, and less about the traditional management services of keeping the lights on.
In this pioneering research, we assessed Pega service partners’ capabilities, differentiators, and vision to deliver and support Pega services. We spoke with 12 service providers, and 34 client references. We also spoke with Pega itself, including a frank and open conversation with Leon Trefler, Senior VP of Global Client Success at Pega, and brother of CEO, Alan Trefler. (Thank you, Leon!)
Phil: What were your biggest learnings from this report Khalda?
Khalda: One of the key learning was that Pega means different things to different customers. As a result, many are not aware of Pega’s full potential to support enterprise digital transformation efforts. Most service providers adopt a land and expand strategy with clients as presenting the entire portfolio and vision can be overwhelming and costly. Leading service providers present the long-term vision and potential of the Pega offerings but do not push clients to adopt it all on day one.
It can also be challenging for Pega partners to organize their Pega offerings as capabilities can be scattered across practices, including application services, customer relationship management (CRM) and the wider digital transformation business units.
What is clear is that Pega service providers are taking this market very seriously by ramping up capabilities and investing in innovation to remain competitive. All the service providers we included in this research expect at least 20% growth in Pega services business in the next year.
Phil: So Khalda, which Service providers are Top on the list? Why?
Khalda: All of the service providers in the research have strong capabilities and are committed to continuing to invest in innovation and talent to grow their Pega practice.
The top three ranks overall, for Execution and for Innovation were the same: Accenture, Cognizant and Virtusa. They are also the three official cloud migration partners as selected by Pega.
- Accenture has the biggest Pega services practice and it has good experience across the Pega services Value Chain globally. Accenture also positions Pega offerings in the wider ecosystem context for clients, for example, its “Power of 3” offerings that integrate Accenture, Pega and Adobe. Moreover, Accenture has won the Pega Partner of the year award for nine consecutive years.
- Cognizant stood out for having the second-highest number of Pega certified resources and for its development of services and solutions to help clients in their cloud migration journey. Cognizant and Pega also have a joint Digital Innovation Center in Arizona, USA. Cognizant also took the top spot in the competitive Voice of the Customer rank, which cemented its overall 2nd rank in the report.
- Virtusa has been a Pega partner for more than 18 years and has the highest number of clients in our research. It has also developed tools to assist clients across the Pega services Value Chain. Notably, its Triple R (Recon, Refactor and Re-platform) set of tools and services which assist customers to modernize, rationalize and optimize their Pega applications.
Others who stood out include:
- TCS for having the highest number of Pega certified resources
- HCL and Tech Mahindra for having a good spread of business across the Pega services Value Chain
- EY, HCL, TCS and Tech Mahindra for being in the top 5 (along with Accenture) for the ability to deliver business transformation services
Phil: Krupa – Anything that surprised you from this study?
Krupa KS, Senior Analyst, HFS Research: In a highly competitive market with giants such as Oracle, SAP, Salesforce Pega continues to attract and retain clients. While looking at the client’s case studies and the references received from the service providers, we observe that some clients have been using Pega products from as long as 6 years. With its strong, user-friendly process management capabilities, technical framework, broad range of additional value-added services and industry-led capabilities Pega has continued to retain end-clients.
Phil: Any interesting trends that you spot in terms of Pega services from speaking with customers Krupa?
Krupa: Pega has been selected by many big and medium companies across all industries. Most of the clients we spoke to mentioned that they selected Pega as part of their business process transformation program. With the ability to transform business processes to be more efficient and more effective with use of workflow automation, real-time intelligence, and low code capabilities, Pega meets the business requirements of the clients. It can be said that these strong capabilities are the reasons why clients chose Pega over other products such as SAP, Oracle, Salesforce
Phil: How do you think this market will evolve in the next 12 – 18 months Khalda?
Khalda: We expect continued strong market demand for Pega services in the next 12-18 months. The comprehensive set of product offerings that link back and front office environments, coupled with the low-code platform, positions Pega as an enabler for true enterprise-wide digital transformation efforts.
Pega also announced its new partner program at the PegaWorld iNspire digital conference in May 2021. Pega is phasing out the old hierarchy of Platinum, Gold, Silver and Registered Partner designations. In its place are the new partner levels of Authorized, Specialized and Elite. Any Authorized or Specialized partner meeting or exceeding its annual growth targets can achieve an ELITE status, regardless of its size. This innovative approach focuses on partner strengths and innovations rather than purely revenues. This should encourage all Pega partners to continue to invest in this space. Looking forward to exciting times ahead!
HFS subscribers can click here to download their copy of the 2021 HFS Pega Service Providers Top 10